North West residential property portfolio changes hands in £150m deal
Gatehouse Bank has announced the sale of its Thistle Build to Rent (BTR) property portfolio to Goldman Sachs Merchant Banking Division and Pitmore for about £150m.
The deal, the largest transaction of its nature in the UK to date, comprises a portfolio of 918 units, predominantly two-and-three-bedroom homes across North West England, mainly around Liverpool and Manchester.
Charles Haresnape, Gatehouse Bank’s chief executive, said: “Thistle has not only been a highly performing investment throughout, it has also proved resilient during the COVID-19 pandemic, which is a key consideration in this market.
“As such, a strategic decision was made to exit Thistle and crystalise returns for the investors.
“The marketing process generated a high level of world-class institutional investor interest and we are pleased to announce a deal has been finalised with Goldman Sachs.”
Advisors to Gatehouse on the deal were PwC and CBRE, with Dentons providing legal representation.
Goldman Sachs and Pitmore were advised by Savills, with Herbert Smith Freehills and Jones Day providing legal representation.
Thistle, a Single-Family Home (SFH) Private Rental Sector (PRS) Fund launched in 2014, is a joint venture between challenger bank Gatehouse, and Sigma Capital Group with a total investment in the region of £110m.
Sigma Capital is Manchester-based and is focused on the private rented sector. It works closely with fellow Manchester business, housing group PRS REIT.
Developments are strategically located in areas of high demand from families seeking to rent quality property with access to schooling, transport networks and ample amenities.
This type of real estate investment has proved one of the most robust under current economic pressures.
Thistle’s occupancy is at 99.8% and rental collection rates of around 98%.
Paul Stockwell, Gatehouse Bank’s chief commercial officer, said: “The UK private rented sector has experienced consistent growth over the past five years underpinned by strong supply/demand dynamics.
“We are now looking to further develop our expertise in this sector with the creation of another fund in 2021.”
Peter Burns, residential capital markets leader at CBRE, said: “The unique nature of this portfolio meant that it was a highly competitive process, further demonstrating the significant weight of capital looking to enter the single family BTR sector.
“We are very proud to have drawn upon our national teams and networks to support Gatehouse on this landmark transaction.”
Simon Hampton, real estate corporate finance partner at PwC, said: “The attractive rental price point and resilient nature of this portfolio is demonstrated by an average occupancy in excess of 99% and rent collection in excess of 98%, even during the COVID-19 pandemic.
“We certainly anticipate that the weight of domestic and international capital entering the single family BTR sector will continue to increase, especially as investors seek to further diversify in an attempt to drive returns.”
Barclays will be providing loan finance to Goldman Sachs to support the purchase.
Graham Chilver, relationship director at Barclays Corporate Real Estate, said: “We are pleased to have been able to support Goldman Sachs in the purchase of this strongly-performing portfolio.
“Having funded these assets since development, the decision to extend our involvement was an obvious fit with our ongoing commitment to the real estate sector in the UK. We look forward to working with Goldman Sachs going forward, whilst also continuing our successful relationship with Gatehouse Bank.”
PwC and CBRE are now working with Gatehouse to source a new capital partner – maintaining the same investment composition and seeking to grow its single-family PRS portfolio to more than 3,000 units over the next five years through forward-funding direct from developers.